PdV refinery project bucks trend of downstream decay
OREANDA-NEWS. October 14, 2016. Venezuelan state-owned oil company PdV says it expects to complete the upgrade of its 190,000 b/d Puerto La Cruz refinery in June 2018, a strategic project targeted at expanding the company's ability to process heavy crude.
Recent advances in the estimated \\$9bn project, one dimension of the cash-strapped company's efforts to develop the Orinoco extra-heavy oil belt, coincides with chronic breakdowns at other Venezuelan refineries, including the 940,000 b/d CRP complex encompassing the Amuay and Cardon facilities. Fuel shortages are commonplace in some parts of Venezuela.
The Puerto la Cruz deep-conversion project will boost the refinery's nameplate crude processing capacity to 210,000 b/d of heavy and extra-heavy crude, including up to 170,000 b/d of 16°API Merey blend supplied by PdV's Orinoco joint venture partners.
The refinery was originally designed to process Venezuelan light crude.
The revamped refinery will increase distillates yield to 72,000 b/d from a current 38,000 b/d, and jet A-1 output to 35,000 b/d from 10,000 b/d, a PdV operator at the refinery said.
The project will allow PdV to shift 80,000 b/d of 30°-32°API Mesa crude that is currently processed at Puerto La Cruz to blending with Orinoco extra-heavy crude to yield the Merey 16.
PdV has been importing light crude for blending because its own light and medium crude production is declining.
The company received the last shipment of bulk modularized components and equipment that form the core of the refinery project on 10 October from Shanghai-based contractor Wison Offshore and Marine.
Wison is a member of the Korean-Chinese Hyundai-Wison consortium executing the project under a turnkey engineering and construction contract awarded in 2012.
Hyundai Engineering and Construction holds a 72pc stake in the consortium, Hyundai Engineering holds 18pc, and Wison Engineering 10pc.
Wison Offshore and Marine has delivered 94 bulk modularized components and related equipment to PdV since the start of 2015, according to the energy ministry.
The components will be assembled and connected over the coming 12 months with pipeline systems, racks, valves and other basic steel infrastructure that is being manufactured by PdV steel construction subsidiary VHICOA at factory facilities in Bolivar state, the energy ministry said.
The project includes the construction of 25 new processing plants. These include a two-train 50,000 b/d deep-conversion unit based on patented HDH-Plus technology developed in the 1980s by PdV's technology subsidiary Intevep; three-train sequential hydro-processing plants; a 130,000-b/d three-train vacuum plant; upgrades of its two existing atmospheric distillation units; and the construction of associated interconnections, pipeline grids, storage tanks, service and auxiliary support systems.
The refinery project was delayed in 2014-15 because of financial problems, partly associated with the collapse of Portugal's Banco Espirito Santo that financed the project, and corruption allegations tied to Wison.
The project's estimated costs have almost doubled from \\$4.8bn when the project was launched officially in 2014, according to the energy ministry's latest estimates.
It is not clear how PdV is currently financing the project.
FUTPV oil union director William Parica tells Argus that the construction site has witnessed frequent labor strife, highlighting tensions between Venezuelan workers and Chinese and Korean engineers.